“We can relocate workloads much more easily and scale much more quickly with the current technology stack in the Azure environment than we could with a private datacenter operation. Because we had software that was 15 to 20 years old, backups were taking hours to run and were impacting business operations. Now everything behind the scenes performs as we expect, and the technology we have is an enabler rather than a disruptor to the business.”

Michael Ross, CIO, Pact Group

Building on synergy for a bold growth strategy

Though mergers and acquisitions are always conceived on the promise of synergy, the actual work of bringing two companies together is often defined by complexity and confusion. Harvard Business Review reports that between 70 and 90 percent of all merger and acquisition deals ultimately fail. In the end, the success or failure of an acquisition lies in the nuts and bolts of integrating two companies into one.

Pact Group, a large, publicly listed manufacturer of plastic and metal packaging with operations in Australia, New Zealand, and Asia, is defying the odds. Since 2002, the company has successfully integrated 44 acquisitions, the most recent of which folded in a business worth upwards of AU$200 million.

Pact Group’s rapid expansion is a physical manifestation of the company’s guiding principle: transformation is an opportunity to drive results. To deliver the best possible and most innovative packaging solutions—from milk bottles to water tanks, sound barriers, and large trays used by apple and orange growers—Pact Group seeks ways to apply its scale and diversity and the early adoption of new technology to bring the world’s best practices to its operations.

Executing on an aggressive plan to become a $5 billion company in five geographies within five years, Pact Group maintains a steady cadence of acquiring and integrating an average of four new businesses a year. To achieve the sought-after synergies in each of its acquisitions, the company needs to be able to subsume each newly acquired business into the Pact IT environment within 12 weeks.

Vital to accomplishing this is elasticity in resources. Pact Group needs to easily provision compute capacity for specific periods of time, scale up for increased user volume and functionality, and support all these changes with flexible systems and processes. In 2013, after more than 10 years of growth, Pact Group was testing the limits of its third-party hosted infrastructure and

outgrowing its relationship with the former sister company that provided its IT services. This is when the company’s new CIO, Michael Ross, set about building an in-house IT team to support the ambitious growth plan. “Pact’s plan is to acquire more businesses of a larger scale with greater frequency moving forward,” says Ross. “So we need to have elasticity in the compute space and in the technology to support that growth. Adding an extra 20 or 30 or 40 percent usage every 12 months is not sustainable in the traditional on-premises model.”

Hit the ground runningThe newly formed IT function’s first objective was to establish a dedicated “greenfield” IT environment and separate all shared systems and services from the company’s previous IT provider. This initiative traversed multiple technology streams, including the deployment of a new cloud-based Windows desktop standard operating environment to 1,600 users across the company using Microsoft Intune, the migration of 2,000 mailboxes from multiple on-premises email platforms to the Microsoft Office 365 productivity platform, and the migration of selected enterprise workloads to Microsoft Azure.

“We needed a cookie-cutter approach to running our technology,” says Justin Shagam, Head of Architecture at Pact Group. “We needed to know that when we have an acquisition and need to make changes within the system we can make those changes very quickly. We needed the ability to rapidly onboard large numbers of users while being able to easily and predictably identify the integration costs and ongoing synergies.”

“We get predictability around the impact of scale on budgets now because we are working on a utility model in Azure. We know that if we add X amount of resources to an existing system to support an acquisition, we can see what that does to our total cost of ownership for ongoing run.”

Justin Shagam, Head of Architecture at Pact Group.

OverviewCustomer: Pact GroupCustomer Website: http://pactgroup.com.au/Country or Region: AustraliaIndustry: Manufacturing (Packaging) Partner: BNW Consulting Partner website: http://www.bnwconsulting.com.au

Customer Profile: Pact Group is a publicly listed manufacturer of plastic and metal packaging with operations across seven countries throughout Australia, New Zealand, and Asia. Pact produces more than 22,000 product variants and serves more than 6,000 customers. The company now generates sales of AU$1.25 billion. In 2015, Pact Group won the Award for Excellence in Innovative Food Packaging (Australia) from the Business Excellence Awards and the Australian Game Changer of the Year from ACQ Global Awards.

Meanwhile, the company’s SAP Enterprise Resource Planning software stack, which serves as the core of the organization’s manufacturing, finance, and sales processes, had become highly customized over time and outlived official vendor support. Because the migration of the legacy SAP system to Pact’s new IT environment was critical to the wider separation activity, Ross took the opportunity to replatform the aging SAP to a new on-premises hosting environment. This would enable Pact to continue running the legacy versions of the SAP application modules while preparing the SAP landscape for deployment to the Azure cloud at a later date.

To support the company’s strong growth trajectory, the IT team became increasingly convinced it needed consumption-based services that could scale quickly to manage the merger of a new business without incurring large one-off capital investments.

The company, therefore, decided to move away from its largely physical and unsupported Oracle/Solaris/SPARC infrastructure to a fully virtualized platform based on an earlier Microsoft SQL Server release to ensure the supportability of the underlying SAP platform. To reduce the total cost of ownership on operational reporting, Pact simultaneously migrated its SAP HANA Business Warehouse workload to an Azure-based Microsoft SQL Server Fast Track architecture.

Brass tacksAfter six months of tracking key performance metrics and usage patterns across its portfolio of applications, the IT team

shifted its attention to transforming its core enterprise applications. Because SAP was the number one priority, Pact reached out to BNW Consulting, a boutique SAP technology consultancy based in Melbourne, Australia, to modernize its SAP software stack by upgrading it to the latest release and moving it to Windows Server 2012 R2 and Microsoft SQL Server 2014, enabling Unicode for non-English speaking operations, and optimizing the server architecture for hybrid cloud deployment. BNW then migrated the development and quality assurance SAP environments from the existing on-premises datacenter to Microsoft Azure, moved all virtual machines from VMware to Hyper-V, and built a new, highly available production disaster recovery (DR) environment in Azure. The upgraded production SAP environment, which originally consisted of more than 10 terabytes of data, remained within the on-premises datacenter and was configured to sync 24/7 with the DR environment in Azure via SQL Server AlwaysOn technology using a private ExpressRoute connection. This made Pact Group one of the first organizations in Australia to leverage the newly available Azure ExpressRoute offering. The upgrade and move to SQL Server 2014 also delivered a 75 percent reduction in data volume, reducing the database size from 10 terabytes down to 2.5.

Because Pact Group relies heavily on its SAP software stack as the core system for planning, reporting, and running its business across all manufacturing and finance functions for each of its 70 sites, BNW deployed stateless virtual machines in Azure to run the SAP applications as a

mirror of the on-premises environment. Having a copy in Azure of each of the four SAP software components—Human Resources, Supply Chain Management, Business Warehouse, and Enterprise Portal—gives the company a true disaster recovery environment for the first time.

“Now the Pact team can deploy virtual

machines in Azure and have them running in a matter of minutes,” says Warwick Chai, BNW’s Founder and Principal. “If Pact needs infrastructure for tactical deployments, they can respond quickly with near-unlimited capacity while they are managing a merger; then, when they’re finished, they can switch it off. They pay just for what they use.”

BNW completed the upgrade and migration in less than three months. “As the core enterprise platform for everyone in sales, manufacturing, and finance, SAP is used across the business around the clock,” says Ross. “So it was rewarding to see the upgrade and migration happen so seamlessly. It removed all the back-end limitations and risks without interrupting our business operations.”

Pressing aheadOf course, there is no lull in the pace at Pact Group. The IT team is continually turning its attention to the next integration and the growth goals of the business. Its commitment to the cloud has helped the team minimize administration overhead and improve the ongoing budgeting processes. “We get predictability around the impact of scale on budgets now because we are working on a utility model in Azure,” says Shagam. “We know that if we add X amount of resources to an existing system to support an acquisition, we can see what that does to our total cost of ownership for ongoing run.”

The utility model in Azure allows the company to not only predict costs but also to offset them at the same time. By shutting down business systems overnight and on the weekends when they are not actively used, the company pays for only 80 out of every week’s 168 hours. That’s less than half the total run time it was paying just months prior.

As a result of the move to SQL Server 2014

“Microsoft Azure allows a very different operating model for Pact. The functionality and the ability to leverage hyperscale capacity and rapidly provision and deploy infrastructure were keys to accelerating the SAP upgrade project schedule. It used to take two weeks to deploy virtual machines; now we can do it in minutes and only pay for the time we consume. I see a massive change in the way Pact is thinking about what it can do with this functionality and how it can use the features in Azure to accelerate project schedules.”

Warwick Chai, Founder of BNW Consulting

Software and Services• Windows Server Enterprise 2012 R2• Microsoft SQL Server Enterprise 2014• 1. Microsoft SQL Server AlwaysOn

• Microsoft Azure Public Cloud1. Azure Virtual Machines2. Azure Express Route

For more information about other Microsoft customer successes, please visit:www.microsoft.com/customers

This case study is for informational purposes only.MICROSOFT MAKES NO WARRANTIES, EXPRESS OR IMPLIED, IN THIS SUMMARY.

Document published November 2015

in Azure, Pact Group now needs only 25 percent the storage capacity required to run the SAP system, which significantly reduces the cost of storage for the new Azure-based SAP environments. Savings in the volume of storage also cascades down to create savings in the cost of backup. “When you retain data for up to seven years [to comply with statutory and legal requirements],” says Shagam, “all of those savings continue to pay back over that seven-year period. And, by changing the architecture of the SAP environment, we were able to decommission a large number of servers.”

Pact created a fully upgraded and supported platform for develpment, quality assurance, and disaster recovery in Azure without any impact to its total cost of ownership and expects to see a project payback in just two and a half years. With a standardized and repeatable cookie-cutter model in place, the company can now better handle the needs of its ongoing acquisitions. “We can relocate workloads much more easily and scale much more quickly with the current technology stack in the Azure environment than we could with a private datacenter operation,” says Ross. “Because we had software that was 15 to 20 years old, backups were taking hours to run and were impacting business operations. Now everything behind the scenes performs as we expect, and the technology we have is an enabler rather than a disruptor to the business.”

New possibilities In addition to supporting Unicode for non-English-speaking operations—a key to expanding business growth in Asia—new capabilities of updated versions of the SAP modules open the door to the

possibility of connecting machines and sensors on the manufacturing shop floor. According to Chai, “Microsoft Azure allows a very different operating model for Pact. The functionality and the ability to leverage hyperscale capacity and rapidly provision and deploy infrastructure were key to accelerating the SAP upgrade project schedule. It used to take two weeks to deploy virtual machines; now we can do it in minutes and only pay for the time we consume. I see a massive change in the way Pact is thinking about what it can do with this functionality, and how it can use the features in Azure to accelerate project schedules.”

After several months of uneventful hybrid cloud operation, Pact’s IT leaders are now evaluating the migration of its primary SAP production environment—the only remaining SAP system on-premises—to Azure, and completing the company’s journey to a pure public cloud SAP landscape.

Aside from being an exception to the world’s woeful M&A stats, Pact’s track record of successfully integrating large businesses in short timespans is a testament to its IT team’s focus and clarity of purpose. Now, with access to terabytes of storage, near-unlimited resources, and new technology, Ross and Shagam no longer have to manage a team focused on building servers or changing tapes; they can put their minds to innovation and continuous improvement. So when the ink dries on the next M&A deal, they have what they need to support the business along its remarkably ambitious journey.